Solar Company with $535 Million in Federal Loan Guarantees Declares Bankruptcy

It was heralded as the first beneficiary of the Obama administration’s energy loan guarantee program, and it was supposed to demonstrate how green technologies and job creation could go hand-in-hand. But instead of being a shining beacon for the solar power industry, Solyndra Inc. is filing for bankruptcy and laying off more than a thousand people.

The California-based solar panel manufacturer filed for Chapter 11 this week, even though it received $535 million in taxpayer-backed assurances to encourage investors of Solyndra.

In May, iWatch and ABC News produced the first serious warning about the company, which enjoyed a powerful connection with President Barack Obama. The story then was about how the Department of Energy cut corners in approving Solyndra’s loan guarantees, by rushing its decision before receiving outside assessments of the company’s viability.

Critics have accused Obama of playing favorites with Solyndra because one of its major investors was George Kaiser, an Oklahoma billionaire who raised between $50,000 and $100,000 for the president during the 2008 election.